Opportunistic Disclosure in Press Release Headlines
Accounting and Business Research, 2012
45 Pages Posted: 14 Oct 2011
Date Written: October 13, 2011
This paper examines managerial, self-serving, disclosure practices in the headlines of press releases announcing annual results. Headlines are a framing feature that can be used to capture and retain attention with the ultimate intention of affecting the thoughts and feelings of readers, influencing their opinions. Therefore, headlines have a key role in a company’s communication strategy. Using a large sample of Spanish listed companies for the years 2005 and 2006, we provide evidence of persistent impression management in press release headlines. Companies, irrespective of whether they perform well or badly, are inclined to stress good news and downplay bad news. Companies with very small profits report surprising amounts of good news. We provide evidence that companies are selective in the performance figures they include in the headlines of press releases. In particular, the disclosure of profits or sales figures in press release headlines is also associated with earnings performance. Finally, we find that larger firms are more likely to issue press releases than smaller ones, consistent with the theory that highly visible firms face a greater demand for information transparency.
Keywords: headlines, impression management, opportunistic disclosure, press releases, prominence, voluntary disclosure
JEL Classification: M40, D82, G30
Suggested Citation: Suggested Citation